BMA REVIEWING OPENING OF LOCAL INSURANCE MARKET TO

UNCLAS MANAMA 000311 SIPDIS DEPT FOR EB/TPP/BTA AND NEA/ARP DEPT PASS USTR:JBUNTIN AND CBLISS USDOC FOR 4520/MAC/ITA/ONE:CLOUSTAUNAU TREASURY FOR LAILEE MOGHTADER CAIRO FOR STEVE BONDY E.O. 12958: N/A TAGS: EFIN ETRD BA SUBJECT: BMA REVIEWING OPENING OF LOCAL INSURANCE MARKET TO U.S. FIRMS REF: A. MANAMA 272 ¶B. MANAMA 269 ¶1. Bahrain Monetary Agency (BMA) insurance regulators are looking carefully at the possibility of opening the local insurance market to U.S. competitors 24-30 months after an FTA entes into force, BMA Governor Shaikh Ahmed bin Muhammad Al-Khalifa told Charge on March 8. Small local brokers, he continued, will need an adjustment period to prepare for competition with large American entrants to the market. Given his responsibility for protecting local business in the financial sector, Shaikh Ahemd said he has no choice but to provide some transition period for local industry. ¶2. Shaikh Ahmed added that he is adopting the same philosophy with respect to new legislation and regulations he expects to come on line this summer. The BMA is currently revising legislation governing the sector as part of an overarching central bank law governing the regulation of all financial institutions in Bahrain. The law, which was drafted with the assistance of PricewaterhouseCoopers in London, follows the British FSA and Singaporean regulatory models of having a generally-worded law supported by a very specific set of central bank issued regulations. Shaikh Ahmed said some regulations have been drafted and circulated to BMA licensees for comment. At the end of the process, he said, Bahrain will have expanded from meeting three IIS standards to 17. Once the laws and regulations enter into force, Shaikh Ahmed said he intends to give the BMA's licensees six months to implement the new rules. ¶3. Shaikh Ahmed provided us with copies of the new regulation consultation papers submitted to the BMA's licensees, and promised to forward an English copy of the draft central bank law to the Embassy as soon as possible. Post will forward the consultation papers to USTR via e-mail and send the law as soon as it is received. FORD